Waddell & Reed selected Riskalyze to provide risk alignment at scale to all of its affiliated advisors, the companies said Wednesday.
The enterprise agreement represents the latest technology initiative to be implemented by Waddell & Reed over the past few months, the company pointed out. Riskalyze’s platform of client engagement tools and analytics technology will help Waddell & Reed advisors “enhance their service and align risk metrics with specific client needs and risk tolerances,” the companies said in a joint announcement.
Riskalyze’s platform “integrates well with our expanding technology options as we continually identify new ways to enhance an advisor’s capacity to deepen client relationships,” Matthew Reeves, senior vice president of Waddell & Reed’s Wealth Solutions Group, said in a statement. Reeves noted that the partnership with Riskalyze represented another step in the strategic evolution of Waddell & Reed’s wealth management business, focused on enhancing its advisor experience via technological enhancements, product expansion and broadening support.
As part of Waddell & Reed’s technology initiatives, the company recently launched WaddellONE, a centralized advisor desktop platform available to all its associated financial advisors and associates, Waddell & Reed Financial CEO Phil Sanders told analysts Tuesday on an earnings call for the firm’s second quarter.
WaddellONE provides “direct connectivity to several of the firm’s existing technology partners” and is a “key part of an incremental series of enhancements the wealth management business is implementing over the next year as part of its business administration program,” he said. “Additional components will include enhanced reporting, improved data analytics and a simplified business processing model,” he pointed out.
The enterprise agreement was finalized in June and the launch came a few weeks later, Patrick Hannon, managing director of major accounts at Riskalyze, told ThinkAdvisor on Wednesday. Prior to the deal, the companies had “maintained an unofficial relationship for a number of years, simply based on advisor interest and common interest,” he said, adding: “Starting in 2018, both teams came together to take deliberate steps to improve the user experience for its advisors and clients. Delivering the Risk Number quickly, across multiple endpoints in the tech stack, is a great win for Waddell & Reed advisors and clients.”
The Risk Number is an “objective, quantitative measurement of an investor’s true risk tolerance and the risk in a portfolio,” Riskalyze says at its website. The company’s “patented technology calculates risk utilizing a scientific framework … and is a more efficient way to discuss risk with a client than subjective terms like ‘moderate’ and ‘aggressive’,” it says.
Waddell & Reed advisors will now be able to “effectively align clients and investment portfolios uniquely suited to their needs through the use of Riskalyze’s sophisticated tools and features including Risk Assessment, Portfolio Analytics, Retirement Maps, and more,” the companies said in their announcement Wednesday. “The enterprise agreement between the two firms is currently in place, and Waddell & Reed has already activated Riskalyze users on the platform,” they said.
Waddell & Reed had $57.4 billion in assets under administration as of June 30, up from $56.1 billion March 31 and $57.1 billion June 30, 2018, it said in its Q2 earnings news release. But the number of advisors and associates of the firm dipped to 1,347 as of June 30, down from 1,367 as of March 31 and 1,469 as of June 30, 2018.